Denmark’s leading gaming operator, Danske Spil, has posted an impressive rise in both revenue and net profit for the first quarter of the year. This uptick was largely spurred by significant growth within the firm’s lottery sector.
Lottery’s Hearty Contribution
The group’s total revenue for Q1 reached DKK1.22bn (£139.9m/€163.3m/$177.1m), marking an 8.4% increase from the DKK1.12bn recorded in the same period last year. Danske Lotteri Spil, the lottery branch, contributed heartily with DKK678m in revenue, a 6.4% year-on-year hike. The group attributes this success to the popular Eurojackpot game and the introduction of the Tuesday draw in March 2022.
Contrastingly, Danske Licens Spil, which oversees sports betting and online casino, saw a downturn of 6.2%, earning DKK397m. The dip was largely due to heightened competition and the implementation of responsible gambling initiatives, such as lower deposit limits. Despite this, Elite Gaming, the gaming hall business, witnessed a promising 24.6% annual rise, raking in DKK76m.
Soaring Profits Despite Costs
Danske Spil’s operational costs for Q1 included DKK158m in state taxes, DKK110m in dealer commission, and DKK62m in other gaming-related costs. Yet, the group managed an operating profit of DKK887m, up 10.2% year-on-year. After accounting for personnel costs, external costs, depreciation, and income tax, the operator reported a pre-tax profit of DKK588m, a 17.1% increase from the previous year. Ultimately, Danske Spil ended Q1 with a net profit of DKK459m, mirroring the pre-tax growth rate.
Implications for the iGaming Industry
The financial success of Danske Spil in Q1, with particular growth in the lottery sector, carries significant implications for the broader iGaming industry:
- The healthy growth in the lottery segment highlights its stability and potential profitability within the iGaming industry, and its foreseen developments into the web3 lotteries and crypto lotteries realm.
- The contrast between lottery and sports betting/online casino growth might indicate that operators need to review strategies to ensure sustained growth across all sectors.
- The ability of Danske Spil to turn a hefty profit despite significant operational costs and regulatory constraints suggests the resilience of the iGaming industry.
Looking forward, Danske Spil remains optimistic about the rest of the year, expecting to align with initial revenue forecasts of between DKK5.00bn and DKK5.20bn, and a net profit ranging from DKK1.70bn to DKK1.8bn.